The following information is needed to reconcile the cash balance for Johnson Catering Services. * A deposit of $5,800 is in transit.
* Outstanding checks total $1,000.
* The book balance is $6,000 at February 28, 2017.
* The bookkeeper recorded a $1,600 check as $17,100 in payment of the current month's rent.
* The bank balance at February 28, 2017 was $17,720.
* A deposit of $500 was credited by the bank for $5,000.
* A customer's check for $3,400 was returned for nonsufficient funds.
* The bank service charge is $80.
What was the adjusted book balance?

Question

Quizplus · Accepted Answer

The adjusted book balance is calculated as follows: Start with the book balance of $6,000. Add the deposit error correction ($5,000 - $500 = $4,500), correct the check error ($17,100 - $1,600 = $15,500, so add back $15,500 - $1,600 = $13,900), subtract the NSF check ($3,400), and subtract the bank service charge ($80). The adjusted book balance is $6,000 + $4,500 + $13,900 - $3,400 - $80 = $18,020.

The Following Information Is Needed to Reconcile the Cash Balance